Phil Turtle
National President

President's Column

Dear Members and Friends,

After several weeks of COVID-19 lockdown, Australia is now emerging with gradually relaxing rules for business and social gathering. This pandemic has a long way to play out yet, until perhaps an effective cure is available, and we will all be called upon to continually adjust our daily routines. As a reminder though just how serious the situation remains, we recount the recent COVID-19 experience of one of our “family”, Bernardus “Bernie” Djonoputro, below.

Our Australian Federal, State and Territory Governments, together with our Health Agencies, have been working tirelessly, and despite the heavy toll this pandemic has taken on so many, we have so far emerged as well as just about any country.

With our economies having taken such a significant and unexpected setback, we can look to the new Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) to provide some new promise and fresh opportunities (see “IA-CEPA Corner” below for more on this). Now with the clock ticking down on the prescribed 60 days to entry into force, Sunday 5 July looms as an important and historic day in the relationship between Australia and Indonesia, when IA-CEPA becomes active.

Prime Minister Scott Morrison together with President Joko “Jokowi” Widodo at Parliament House in Canberra, Australia, Feb 10 2020 (Presidential Palace Press Bureau/Muchlis Jr)

Only as recently as Monday 4 May, our respective Trade Ministers met via video conference, and gave IA-CEPA the final nudge towards entry into force. Both Ministers highlighted the importance of IA-CEPA to the recovery of our economies, and to businesses in both countries.

In the lead up to the IA-CEPA announcement, AIBC has been working with its Members on a range of issues, including the impacts of COVID-19 on the important International Education sector, and the plight of many International Students. AIBC connected with all of our University Members in every State and Territory, and made representation to the Federal Education Minister, Hon Dan Tehan MP, sharing our views on this sector and situation.

We are also very conscious of the devastating effects of COVID-19 on the Tourism and Hospitality sectors, and we have also been working with Government, Industry Groups, and individual organisations, exploring ways to assist to revitalise these sectors in both countries.

AIBC has also been in close collaboration with a number of our partners and stakeholders, on a variety of Webinar and other forums, keeping our Members and Friends informed on a range of current issues. Only last week we launched our own series of Webinars, this time with the honours going to our Victorian Chapter (see below for details).

This event brought together a number of our key stakeholders from Austrade, The Indonesian Consulate General (Vic/Tas), the Indonesian Ministry of Trade (ITPC), BKPM (IIPC) and the Australia-Indonesia Centre, with around 250 participants, a great indication of the interest in Trade and Investment between our countries.

As the restrictions from COVID-19 continue to hopefully ease, we will be looking to recommence face-to-face events soon, and kick-off planning once again for our postponed 2020 National Conference.

At this important time, the AIBC is working hard to provide our Members the information they need, amongst a community of support, for their interests in and with Indonesia. We will be playing an important role too in the socialization of the Agreement, to make sure as many businesses in both countries know about IA-CEPA and are well prepared to tap into the created opportunities.

We encourage our Members and new Members to be part of the success of IA-CEPA with us. Please visit us to renew or join today.

Phil Turtle
National President

It is indeed an exciting time, with IA-CEPA having cleared its final hurdle before its automatic entry into force, 60 days from Indonesia’s notification that its processes were complete. This will see IA-CEPA activated from Sunday 5 July 2020.

In their respective announcements, Trade Ministers Simon Birmingham and Agus Suparmanto, both reflected that IA-CEPA will serve as a well needed boost to both countries, as their economies strive to recover from the COVID-19 pandemic.

AIBC once again has played an active role in IA-CEPA development, over more than 10 years, and welcomes this important milestone. More can be seen about this here.

The benefits and opportunities from IA-CEPA are many and broad in scope, so business needs to prepare over the next couple of months if it is to be ready on Day #1. Correct paperwork and other measures may be required to tap into some of the benefits, so please consult with AIBC or your advisers.
 

 Trade Ministers Simon Birmingham and Agus Suparmanto meet in November 2019 in the wings of the 35th ASEAN Summit in Bangkok

Now that the Agreement will soon be in force, attention will be upon a range of implementation initiatives, announced earlier during President Jokowi’s State visit to Australia in February, including;

Australia and Indonesia committed to deepening our economic, trade and investment relationship, including taking forward initiatives this year to harvest early benefits from IA‑CEPA ratification. This will include full implementation of IA-CEPA and early work on an IA‑CEPA Economic Cooperation Program; an Australian Business Week delegation led by the Australian Minister for Trade, Tourism and Investment, and a further visit by major Australian private sector investors; the establishment of a CEO Roundtable; the development of a Blueprint for Trade and Investment in Indonesia and assistance to Indonesian SME exporters.

A bilateral Economic, Trade and Investment Ministers’ Meeting will be inaugurated, to drive this deepening of cooperation on bilateral and global economic issues.  A Senior Economic Officials’ Meeting will also be established.

Leaders noted opportunities for increasing people-to-people links, including through IA‑CEPA’s skills package, and that Indonesian access to Australia’s Work and Holiday Visa will increase from 1000 to 4100 upon IA-CEPA’s entry into force, and increase further to 5000 in the sixth year of the Agreement.

Clearly planning for any Trade Missions or other related travel will be on hold pending further progress in dealing with COVID-19.

Detail on IA-CEPA can be found on the DFAT IA-CEPA website, which will be updated with further information for industry and businesses about how to use IA-CEPA, as soon as possible prior to the Agreement entering into force.

Further background on the history of IA-CEPA can be found in earlier submissions of AIBC and the Indonesia-Australia Business Partnership Group (IA-BPG*).

(* the Indonesia-Australia Business Partnership Group IA-BPG, comprises the AIBC, ACCI, Ai Group, IABC, KADIN and APINDO)

Following the devastating and ongoing effects of the COVID-19 pandemic, the Governments in both countries have launched a series of economic measures aimed at protecting economies, businesses and individuals.

For Australia, the Australian Government’s website here, is a comprehensive portal to the very broad range of health and business related information.

Also, there have been a series of important initiatives to assist Australian businesses by Export Finance Australia, Austrade (Export Market Development Grants), and the International Freight Assistance Mechanism.

For Indonesia, there is also a broad and expanding array of initiatives, however businesses operating in Indonesia are best served by information obtained from their established advisers.

Our counterparts at the IABC in Jakarta have been kindly circulating an updated informal timeline/overview, with the latest here together with a recent summary of initiatives here.

A sample of other published advice from RSM Indonesia can be seen here.

COVID-19 - A Personal Tale of Survival

Known to many at AIBC and IABC, and more broadly across the Australia-Indonesia community, Bernardus (Bernie) Djonoputro shared with us his own tale of survival, having recently been struck with a very serious case of COVID-19. Bernie was fortunate to receive life-saving care in the ICU at the Pertamina Jaya Hospital in Jakarta, and all of Bernie’s friends and colleagues would be very grateful at the outcome, as Bernie continues his recuperation.

Bernie Djonoputro on leaving ICU with some of his medical team at Pertamina Jaya Hospital, Jakarta
 

Bernie has been for many years at the forefront of Australia-Indonesia relations, since having participated in the Australia-Indonesia Youth Exchange Program (AIYEP) back in 1986, with this Program taking in elements in NSW, East Kalimantan and Bandung. He has gone on to a varied and distinguished career in Urban Planning and Infrastructure Development, and has recently been appointed as AIC’s Infrastructure and Sustainability Fellow.

Bernie shared with us his own deeply personal and moving words about his ordeal, which can be viewed here. (Note: This story is shared with Bernie’s express permission).

AIBC extends its best wishes to Bernie and his family, and thanks Pertamina Jaya Hospital and its medical staff for taking such good care of him.

Together during and beyond COVID-19 Webinar

On Wednesday 6 May AIBC Victoria conducted its first webinar entitled Australia and Indonesia: Together during and beyond COVID-19.

Webinar panellists participate via Zoom

The panel consisted of:

• Consul-General in Victoria and Tasmania, Ibu Spica Tutuhatunewa;
• Director of the Indonesia Trade Promotion Centre (ITPC), Ibu Ayu Siti Maryam;
• Director of the Indonesian Investment Promotion Centre (IIPC), Pak Henry Rombe;
• Indonesia Director of the Australia Indonesia Centre, Kevin Evans;
• Austrade’s Acting General Manager for ASEAN and Senior Trade Commissioner for Indonesia, Sally Deane; and
• Director of TAFE Victoria, Victorian Government Trade and Investment Office for Southeast Asia and National President of the Australia-Indonesia Youth Association (AIYA), Clarice Campbell.

The panel explored Indonesia’s diplomatic, trade and investment priorities in Australia, Australia’s and Victoria’s trade and investment priorities and the opportunities in Indonesia, and perspectives on the Indonesian health and economic response.  Over 200 people participated in the webinar, joining from across Australia and Indonesia.  AIBC will be offering other webinars from around Australia with more outstanding panellists this year.

A copy of the Webinar recording is available here and the presentations can be found here.

Kopi Digital with AIBC Young Professionals

On May 26, the AIBC Young Professionals are meeting (virtually, of course!) to discuss an old friendship in a new era.

Join this complimentary interactive session to share your perspectives on how COVID-19 will impact Australia’s relationship with Indonesia and how we can navigate the uncertainties of a post-pandemic future.

To register, please click here or for more information email yp@aibc.com.au.

Jared Heath,
VIC Chair

Indoview

IIPC and BKPM Newsletters
 

The Indonesia Investment Promotion Centre (IIPC) has published its April newsletter with updates on Indonesia's investment climate and what's happening at IIPC Sydney.

Read the newsletter here.

BKPM in Jakarta also published their latest newsletter, which can be viewed here.
 

Agricultural Trade implications of COVID-19 - Impacts on Indonesia

The economic impacts of COVID-19 are beginning to bite in Jakarta and more broadly in the major cities in Indonesia. The Indonesian government has responded with stimulus packages. However, the broad scale loss of jobs and business restrictions will have a growing impact on the Indonesian economy and on the demand for food. These impacts have the potential to reduce demand for Australian exports and raise food security concerns for Indonesia’s most vulnerable.

Indonesia is Australia’s sixth largest market for agricultural, fisheries and forestry exports, worth $2.6 billion in 2018–19 and comprising a mix of staple and discretionary high-value food products (Figure 1). Indonesia is Australia’s largest market for wheat, supplying the low-cost instant noodle market.  Australia is not alone in supplying Indonesia. Other exporters include Ukraine and Argentina for wheat, India and Brazil for beef and beef products, New Zealand for dairy, and Thailand for raw sugar.  To read the entire article, please click here.
 

Proposed Manpower Law Changes

In his recent article, Bill Sullivan of Christian Teo & Partners, looks at proposed changes to Indonesia’s Manpower Law.

"The Indonesian Government is proposing major changes to the regulatory regime for manpower.

Overhauling the regulatory regime for manpower is a key element of the Government’s ongoing endeavours to make Indonesia more competitive with other South East Asian nations and thereby attract more foreign investment to Indonesia.

It remains to be seen whether or not the ongoing Covid-19 crisis, with the attendant prospect of large increases in unemployment, will make it politically impossible for the Government to ultimately convert, into law, the proposed changes to the regulatory regime for manpower.”

To read this article in full, click here.

Indonesia Market Update

In their April 2020 edition of “Indonesia Market Update”, Morelink Asia Pacific provide news updates across many key sectors including the Indonesian economy, investment, trade, retail, agrifood, manufacturing, automotive, ICT and infrastructure sectors.

To read this update, click here.